KAVUNDAMPALAYAM PALANISAMY MANOHARAN,COIMBATORE vs. ITO, NCW-3(1), COIMBATORE

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ITA 68/CHNY/2026Status: DisposedITAT Chennai22 July 2026AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, noting that the assessee had filed new relevant materials for the first time, decided to grant an opportunity to present these before the AO. The assessment was restored to the AO for a fresh assessment.

What were the facts?

The assessee did not file an income tax return for AY 2016-17. The AO received information about a cash deposit of Rs. 97,21,000/- in the assessee's bank account. The assessee claimed this was accumulated agricultural income from past years.

What were the issues?

The primary issue was the validity of the assessee's claim that the large cash deposit represented accumulated agricultural income from previous years, and the adequacy of evidence provided to substantiate this claim.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI GAGAN GOYAL

Hearing: 15.06.2026

आयकर अपीलीय अिधकरण ’सी’ �ायपीठ, चे�ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI �ी एबी टी. वक�, �ाियक सद� एवं �ी गगन गोयल, लेखा सद�य के सम� BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER

ITA. 68/Chny/2026 �नधा�रणवष�/Assessment Year: 2016-17 Kavundampalayam Palanisamy VS Income Tax Officer, Manoharan. Non-Corp Ward-3(1), CBE No.8, Thiruvenkadam Nagar, TVS Coimbatore Nagar Road, Kavundampalayam B.O, Coimbatore North, Coimbatore- 641030 [PAN: AXBPM 3226 A] (अपीलाथ�/Appellant/Revenue) (��यथ�/Respondent) : अपीलाथ� की ओर से/ Appellant by Mr. Boopendran, Advocate : ��थ� की ओर से /Respondent by Mr. Chilakamarthi Vijay Raju, Addl. CIT : सुनवाईक�तार�ख/Date of Hearing 15.06.2026 : घोषणाक�तार�ख /Date of 22.07.2026 Pronouncement आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as ‘Ld.CIT(A) ‘), Delhi, dated 28.10.2025 for the Assessment Year (hereinafter referred to as ‘AY ‘) 2015-16.

ITA No.68/Chny/2026 (AY 2016-17) Kavundampalayam Palanisamy Manoharan :: 2 :: 2. The brief facts is that the assessee didn’t file return of income for AY.2016-17 and the AO received information that the assessee made cash deposit of Rs.97,21,000/- in Axis Bank and there were payments to contractors for Rs.71,946/- attracting TDS; hence the AO reopened the assessment by issuing notice u/s.148 on 28.03.2023 and asked the assessee to prove the nature and source of the deposits. Pursuant to it, the assessee is noted to have filed return of income on 27.04.2023 declaring an income of Rs.71,950/- and agricultural income of Rs.22,06,009/-. According to the assessee, the nature and source of Rs.97,21,000/- was accumulated agricultural income of past years. However, the AO didn’t accept it, by inter alia taking note that even though the assessee has shown the profit from agricultural activities at Rs.21,18,728/-, but showed only meagre expenses to the tune of Rs.64,876/-, which fact, according to the AO was comparatively very low considering the gross receipt. Further, according to the AO the assessee didn’t file any earlier year return of income to substantiate that he had earned agricultural income. Further, according to the AO, even though assessee has shown agricultural income of Rs.22,06,009/- his total credits in the bank account was to the tune of Rs.1,08,31,816/-. Further, the AO doubted the probability of assessee keeping Rs.90 lakhs in his hand for more than three (3)-four (4) years. Hence, for reasons given in the assessment order, the AO being not satisfied with the explanation of the

ITA No.68/Chny/2026 (AY 2016-17) Kavundampalayam Palanisamy Manoharan :: 3 :: assessee is found to have taken adverse view against the assessee and having accepted an amount of Rs.2 lakhs as profit from his agricultural activities, AO added Rs.1,06,37,816/- u/s.69A of the Act by passing assessment order on 14.02.2024.

3.

Aggrieved the assessee preferred an appeal before the Ld.CIT(A), who noticed that the assessee has reiterated the submission before the AO and dismissed the appeal of assessee, (i) by taking note that the assessee didn’t file copies of any return of income filed in earlier years, and (ii) also taking note that Wealth Tax Act, 1957 was in force till A.Y.2015-16 and certain provisions of it, rebutted the claim of assessee holding Rs 90 Lakhs for few years in his hand, concurred with the action of the AO.

4.

Aggrieved the assessee is before us and submits that the assessee has been able to trace out the Income-Tax Returns (ITR) filed for earlier years from AY.2011-12 to AY.2014-15 wherein asssessee has shown substantial agricultural income and also filed certain documents before us and tried to substantiate the source of the cash as from the accumulated agricultural income. Since, assessee has filed for first time certain relevant materials, for adjudicating the issue in hand, without making any observation about the merits of the same, for the ends of justice and fair play, we are inclined to grant one more opportunity to the assessee to

ITA No.68/Chny/2026 (AY 2016-17) Kavundampalayam Palanisamy Manoharan :: 4 :: present the same before the AO. Hence, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of AO for framing de-novo assessment. The assessee to file the ITRs and other relevant documents to substantiate his claim about the nature and source of the impugned cash deposits. The AO to pass the assessment order in accordance with law after hearing the assessee.

5.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on the 22nd day of July, 2026, in Chennai. Sd/- Sd/- (गगन गोयल) (एबी टी. वक�) (ABY T. VARKEY) (GAGAN GOYAL) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER चे�नई/Chennai, �दनांक/Dated: 22nd July, 2026. YS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

YASHVI Digitally signed by YASHVIR SINGH R SINGH Date: 2026.08.04 11:59:17 +05'30'

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